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Flextronics International Ltd (NAS:FLEX)
Beneish M-Score
-3.00 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Flextronics International Ltd has a M-score of -3.00 suggests that the company is not a manipulator.

FLEX' s 10-Year Beneish M-Score Range
Min: -6.71   Max: 1.64
Current: -3

-6.71
1.64

During the past 13 years, the highest Beneish M-Score of Flextronics International Ltd was 1.64. The lowest was -6.71. And the median was -2.56.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Flextronics International Ltd for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.794+0.528 * 0.9257+0.404 * 1.0615+0.892 * 0.9299+0.115 * 0.8666
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0555+4.679 * -0.0494-0.327 * 0.9782
=-3.00

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $2,137 Mil.
Revenue was 5566.248 + 5951.6 + 7025.054 + 6528.517 = $25,071 Mil.
Gross Profit was 352.341 + 378.817 + 408.657 + 377.081 = $1,517 Mil.
Total Current Assets was $9,080 Mil.
Total Assets was $12,100 Mil.
Property, Plant and Equipment(Net PPE) was $2,143 Mil.
Depreciation, Depletion and Amortization(DDA) was $529 Mil.
Selling, General & Admin. Expense(SGA) was $845 Mil.
Total Current Liabilities was $6,496 Mil.
Long-Term Debt was $2,632 Mil.
Net Income was 110.85 + 135.112 + 152.899 + 138.903 = $538 Mil.
Non Operating Income was 0.164 + -94.759 + -5.067 + -2.584 = $-102 Mil.
Cash Flow from Operations was 362.276 + 124.61 + 363.179 + 387.414 = $1,237 Mil.
Accounts Receivable was $2,895 Mil.
Revenue was 6642.745 + 6723.934 + 7183.442 + 6410.106 = $26,960 Mil.
Gross Profit was 380.785 + 362.144 + 398.619 + 368.423 = $1,510 Mil.
Total Current Assets was $8,989 Mil.
Total Assets was $12,068 Mil.
Property, Plant and Equipment(Net PPE) was $2,255 Mil.
Depreciation, Depletion and Amortization(DDA) was $467 Mil.
Selling, General & Admin. Expense(SGA) was $860 Mil.
Total Current Liabilities was $7,233 Mil.
Long-Term Debt was $2,074 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(2137.255 / 25071.419) / (2894.622 / 26960.227)
=0.08524667 / 0.10736638
=0.794

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(378.817 / 26960.227) / (352.341 / 25071.419)
=0.05600735 / 0.060503
=0.9257

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (9080.227 + 2143.221) / 12100.18) / (1 - (8989.423 + 2254.664) / 12067.824)
=0.07245611 / 0.06825895
=1.0615

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=25071.419 / 26960.227
=0.9299

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(466.993 / (466.993 + 2254.664)) / (529.108 / (529.108 + 2143.221))
=0.17158408 / 0.19799508
=0.8666

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(844.581 / 25071.419) / (860.454 / 26960.227)
=0.033687 / 0.03191568
=1.0555

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((2632.138 + 6496.228) / 12100.18) / ((2073.854 + 7233.212) / 12067.824)
=0.75439919 / 0.77122984
=0.9782

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(537.764 - -102.246 - 1237.479) / 12100.18
=-0.0494

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Flextronics International Ltd has a M-score of -3.00 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Flextronics International Ltd Annual Data

Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15
DSRI 0.86170.95081.38450.5811.35120.9140.95611.01371.15320.8651
GMI 1.21090.99281.15431.03180.81930.90711.07611.04550.8970.9334
AQI 0.98750.94280.89740.26810.54170.75021.0181.59061.06471.0998
SGI 0.97191.23321.46171.1230.77911.17971.03170.80321.10771.0015
DEPI 0.92951.13440.77690.97890.91511.38680.89870.97211.22460.8219
SGAI 0.90820.9571.00841.08031.00580.8861.06091.14230.98070.9639
LVGI 0.97920.97511.14011.46190.96970.99060.98530.9661.05340.9688
TATA -0.0410.0125-0.083-0.6506-0.0733-0.023-0.0268-0.0853-0.0727-0.012
M-score -2.70-2.25-2.14-6.25-2.98-2.59-2.59-2.80-2.60-2.66

Flextronics International Ltd Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.01411.14021.09831.07361.15321.01240.91990.88040.86510.794
GMI 1.04511.10661.19011.04530.8970.85510.84670.90890.93340.9257
AQI 1.59061.22731.12110.92391.06471.15131.24681.20151.09981.0615
SGI 0.80290.84050.90881.00151.10771.15291.14641.09081.00150.9299
DEPI 0.97210.98130.99551.23861.22461.17241.03740.84690.82190.8666
SGAI 1.14161.16541.13571.10070.98070.89010.85380.87080.96391.0555
LVGI 0.9661.01371.05451.0571.05341.00180.97790.97470.96880.9782
TATA -0.0833-0.1015-0.0698-0.0777-0.0736-0.0394-0.0575-0.0221-0.004-0.0494
M-score -2.79-2.86-2.69-2.79-2.60-2.49-2.64-2.57-2.62-3.00
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